Shelter Insurance Issues?

[Tom McNutt]

As a bit of background, I have owned a duplex in Georgia that I use for short-term rentals for about two years. When I purchased it, I got several quotes from insurance companies and ultimately went with State Farm. Two years in, I haven't heard a peep from them and I haven't made any claims. I pay my policy and things are good as far as I know.

Fast forward to earlier this year and I purchased three SFRs in Kansas City. All three are turnkey properties from USREEB. As I did in Georgia, I shopped for insurance and ended up choosing Shelter Insurance. They seemed to have a lot of folks on bigger pockets suggesting them and their price was reasonable.

At first, everything was fine. I signed up and we proceeded towards closing. Then, after a week or so, I got an email from the agent saying asking if I had made claims on a property that my parents own in South Carolina and, if so, then unfortunately we couldn't move forward. I replied that I had not because I don't own the house or have any insurance on it. Instead, I suggested that perhaps my parents had made a claim at some point.

A bit of time after closing, I got an email from the agent that two of the properties (we'll call them property A and B) need repairs in order to continue with coverage. I'm a bit surprised because I purchased turnkey properties, but the agent sends over some pictures. After a bit of back and forth with USREEB, it turns out that the agent photographed the wrong house for property A and he tells me to ignore anything he mentioned about it previously. Regarding property B, I ask for some follow-up to determine what the repairs would entail because USREEB maintained that there was not any damage.

A week later, I get a termination notice regarding property C because the underwriter suspects that there may be asbestos in the siding and Shelter will not insure homes with any asbestos. They would need to see a lab test with 0% asbestos to continue coverage.

Earlier this week, I get another termination notice, this time for suspected asbestos on property A (once they went to the correct house). They also say that, if I don't get the repairs done on property B that they suggest, they will drop coverage there as well. (If you're curious about the discrepancy between what USREEB says and what they say, check out the image.)

This leaves me wondering, did I get super lucky with State Farm on my Georgia duplex or super unlucky with Shelter here? Do insurance companies typically make demands to continue insurance that are cosmetic rather than structural? Why would Shelter insure older homes that one might reasonable expect have had asbestos siding at some point in their history and then drop coverage after they go check? 

From a customer perspective, I feel frustrated. I understand insurance is about calculated risks, but in theory customer experience should factor in a company's business model somewhere.